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非洲风险奖励指数

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非洲风险奖励指数

 

 Table

 of

 contents

 Foreword

  02

 Post-Pandemic:The

 impact

 of

 COVID-19

 and

 outlooks

 for

 Afñca’s

 recovery

  04

 The

 Great

 Enabler:

 How

 Africa

 is

 using

 new

 digitd

 solutions

 to

 revitdise

 old

 industries

  08

 Hostile

 Narratives:

 Reputation

 and

 African

 geopo!it!cs

 in

 the

 age

 of

 influence

 opamt!ons

  12

 Annex

  15

 AboUt

 Us

  16

 Contact

 us

  18

 Afdca

 R¥k•Pe

 kidex:

 a

 4›amW

 g0g0

 e••sree

 and

 ehanges

 the

 gsp¥mW

 eo4e

 edlgon

  For

 reward

 sc"orae:

 improved

 reyrard

 eosre

 csdac ,

 negative

 changa

 \iaduced

 rawardl

 coded red For

 rirk

 r›nsre*:

 rerJiJr:er4

 rink

 srcre

 cc›decI

 green.

 i

  rktk

 era

 r"ode‹4

 red . Zambia

 Egypt

 Botswana

 Ethiopia

 Senegal

 Tunisia

 Foreword

 Gontrol

 Risks"

 and

 N

 KC

 African Economics’

  Africa

 experts

 are pleased

 to present

 the fifth edition

 of

 the Africa

 Risk-Reward

 Index.

 The

 index

 captures

 the

 evolution

 of the

 investment

 environment

  and

 risk

  longer-term

 outlook

 of

 key

 trench

 3F

 ap

 ng

 the

 ir

 vests

 er

 t

 far

 c!sccpe

 in major

 African

 economies

 and

 s0me suggestions

 o"

 successfLil

 strategies

 "or differed

 I

 cont+xls.

  beyond

 the

 hezcIine-grabbing

 new+’s urid

 riuiau aurrcurfidirjg thu

 topic

 uf investment

  inio Africa.

  Risk

 and

 reward in

 2020

 landscape

 in

 major

 African

 markets.

  The

 index

 offers

 B

 CCi£p

  r

  tive

 gr1a[JBhC[ ot

 market

 opportun

 ties

 znd

 r

 sks

 across the

 col

 tir

 er

 t.

 It

 provid+s

 a

 grounc!+d,

 Our

 ar

 alysis

 is

 based

 on

 our

 exoerts’

 1

 he

 Atrica

 Hisk-Heard

 Index

 plots

 vi+"w

 of

 structural political nnd

 eaCf

  couf

 try’s

 p+rforfTjzIric+

 r+Iative

 to ecenemic

 feet

  red

 of

 ness

 merge"s,

  African

 p.°.ers

 anrJ

 highlights

 how

 erJJe

 of reir

 forced

 by

 our

 on-the-ground

  AtricaI

 argest

 econom

 es

 are

 outshone opurntiur

 ial upper unau,

 yvfiicf

 i

 Uo+s

 by

 sm cII+

  rvala.

  The

 position d

 egch

 may

 Is

 ddir*ed

 by

 Its

 risk

 end

 ord

 score.

 be

 she

 oT

 its bubble

 represents

 she

 Uze

 of

 the

 coumry9

 GOP.

 The

 \ndivIdueI

 soores

 for

 datail

 in

 the

 anrmx.

 N

  DRC

  Ethiopia

 g‹

 3

 ,

 o

 c

 e

 3

 5

 8

 Risk

 More,

 1—1

 0

 U

  C6te

 d"Ivoine

  02

 It

 should

 be

 no

 surprise

 that

 the

 overall improvement

 seen

 across

 the

 continent in

 recent

 years

 has

 been

 reversecl

 by

 the COVID-1

 0

 pandemic.

 Itc

 huge

 economic costs

 have

 caused

 a

 universal

 fall

 in rewarcl

 scores,

 even

 if

 its

 impact

 c+i

 risk scoias

 is

 more

 varied.

 Ethiopia,

 which

 is facing

 the

 chaIIenge9

 of

 COVJD-19

 and escalating

 ethnic

 tensions

 amid

 delayed elections,

 has

 sean

 the

 largest

 fall

 in

 its QO9ition.

 Fqypt’s

 risk

 9c0+e

 has

 remained relatively

 steady,

 but

 its

 reward

 score

 has been

 badly

 hit

 by

 the

 continents

 second- largest

 coonavirus

 ••

  -load

 and

 a

 dip in

 oil

 and

 tourism

 revenue.

 Algerian

 risk scoia

 has

 actually

 improved

 since

 the mass

 protest9

 8Dd

 landm8Fk

 elections

 of 201

 9,

 but

 challenges

 in

 its

 oil-dependent economy

 have

 still

 dragged

 down

 its overall

 score,

 This

 fall

 in

 potential

 rewards

 is

 not

 unique to

 Africa;

 2020

 is

 set

 to

 be

 the

 worst

  War.

 However,

 there

 are

 already

 signs that

 Africa

 will

 be

 disproportionately

 hit

 as

 risk-adverse

 investors

 withdraw horn

 frontier

 markets.

 This

 may

 pr‹we a

 mistake.

 Africas

 recovery

 Is

 likely

 to be

 prolonged

 and

 uneven,

 but

 it

 could

 also

 be

 transformative.

 In

 6orra

 markets, COVID-19

 has

 given

 new

 Impetus

 to positive

 reforms,

 with

 a

 greater

 focus

 on regional

 cooperation

 and

 iaal

 thought given

 to

 how

 to

 addre9s

 longstanding impediments

 to

 growth.

  Our

 first

 article

 in

 thie

 edition

 of

 the

 Africa

 Ri9k-Reward

 Index

 looks

 at

 the longer-term

 impact

 and

 imagines

 a

 post- pandemlc

 landscape.

 We

 should

 not pretend

 that

 this

 is

 anything

 Dut

 a

 crisis for

 Africa

 or

 that

 the

 opportunities

 that emerge

 will

 somehow

 compensate

 for

 the

 humao

 and

 ecaomic co9t.

 But

 there are

 opportunities.

 From

 the

 aooelerated development

 of

 capital

 markets

 to

 the forrnalisgtiou

 of

 the

 workforce,

 there

 6re

 indications

 that

 substantial

 changes

 will both

 serve

 the

 continent

 h

 people

 well and justify

 a

 renewed

 excitement

 in

 Africa

 w0‹O capital

 flight

 ftom

 frontier

 market9 in

 the

 first

 half

 of

 this

 year,

 their

 is

 a

 huge and

 profitabl0

 role

 to

 play

 for

 investors who

 stay

 or

 return.

 One

 aspect

 of

 Africa\s

 recovery

 is

 likely to be

 the

 ir›cma9ingIy

 digitali9ation

 of its

 ecc+iorny.

 After

 successive

 years

 of

 recoid

 funding,

 ”African

 tech"

 has become

 a

 buzzword

 so

 a

 erused

 as

 to

 be

 almost

 meaningless.

 The

 chaIIc+iges

 ot COVID-19

 may

 serve

 as

 a

 needed

 resat

 of

 expectations

 and

 app

 hes.

 African tech

 is

 exciting

 when

 it soNes

 African problems,

 not

 when

 it

 ic

 assumecl

 that high-tech

 indu9tries

 can

 simply

 bypass these

 problems.

 Our

 seoond

 article explores

 how

 COVID-19

 has

 brought many

 of

 these

 problems

 to

 the

 fore

 and how,

 by

 addressing

 them,

 African

 tech

  mvitali9e

 more

 traditional

 indu9tries.

 Finally,

 our

 third

 article

 looks

 at

 i6rance operations.

 Africa

 has

 always

 struggled to set

 its

 own

 narrative;

 to

 get

 past geraralisatious

 that

 cast

 the

 entiia continent

 as

 beyond

 redemption

 or

 as the

 next

 economic

 powerhouse.

 But these

 struggles

 ae

  becoming

 moia

 acute

 as

 internal

 and

 external

 actors actively

 push

 false

 or

 divisive

 narratives for

 their

 own

 objectives.

 Influenoe operations

 and

 dlsintormatlon

 campaigns in

 Africa

 are

 rot

 a

 smaller-scale

 replica

 of the

 bats

 arid

 trolls

 6o

 frequently

 imported on

 in

 the

 rest

 of

 the

 wold; they

 are

 their own:

 different

 actors,

 different

 tactics, and

 different

 risks

 po6ed

 to irwesto+s.

  Of

 cour9e,

 these

 three

 article9

 are themsehas

 generalisations,

 as

 is

 any att0nJpt

 tO

 Id0ntlfy

 common

 themes acros9

 di9parate

 countries.

 There

 are

 0xC0Q"tions

 to all

 thr0e

 and

 a

 hug0

 rang0 of

 other

 factors

 th8t

 are

 not

 mentioned. Auy

 investor

 looking

 to minimise

 risks and

 maximise

 rewards

 should

 focus

 not

 on

 the

 headIine9

 but

 on

 the

 sp

 fic country,

 sector

 and

 project

 or

 transaction context.

 Nonetheless,

 the

 pcs

 of identifying

 opportunities

 FFIUSt

 Degin sorr›ewhere,

 and

 we

 hope

 that

 this edition

 of

 the

 Africa

 Risk-Rewaid

 Index starts

 those

 discu9stons.

  03

 Post-Pandemic:

 The

 impact of

 COVID-19

 and

 outlooks

 for

 Africa’s

 recovery

 Any

 foracast

 of

 a

 post-pandemic

  time

 of

 writing,

 confirmed

 case9

 have

 just

 passed

 a

 million

 and

 deaths

 are approaching

 25,000.

 Th0se

 numb0rc

 are slreedy

 tregic

 and

 continue

 to

 increase but

 remain

 small

 in

 comparison

 with other

 parts

 of

 the

 world.

 The

 immediate economic

 impact

 is

 8Iso

 riot

 unu9ual.

 African

 GDP

 will

 likely

 contract

 by between

 6%

 and

 1096

 this

 y6ar;

 severe, 8nd

 its

 first

 rece9sion

 sinc›e

 1994,

 but

 not out

 of

 line

 with

 other

 parts

 of

 the

 world.

 The

 distinctive

 impact

 of

 COVID-16

 on AfrjQg

 games

 from

 the

 continent’s

 limited ability

 to support

 a

 long-term

 response.

 Many

 Amical

 states

 hara

 the

 tapaciiy

 to

 pond

 quickly

 and

 efficiently

 to paridemics.

 This

 is

 built

 on

 axperience:

 at I8dSt

 41

 African

 countries

 have

 previously experienc›ed

 pandemics.

 Many

 applied the

 lessons

 learnt

 in

 their

 successful

 "nitial

 responses

 to

 COVID-19,

 and

 swift and

 strict

 lockdowns

 helped

 to

 slow

 the initia!

 6pread

 of

 the

 virus.

 But

 these

 same

 !ockdowns

 as

  now

 being

 eased,

 even as

 case

 numbers

 rise.

 Fifteen

 African

 canines closed

 their

 borders

 balore

 they

 govanments

 simply

 do

 not

 have

 the 1tscaI

 headrc›om

 to p

 de the

 support measures

 necessary,

 arid

 also

 have

 fewer alternative

 rr›esns

 of

 propping

 up

 the

  introduced

 a

 range

 of

 monetary

 pdicy rr›easufes,

 including

 tbe

 provision

 of

 bllions of

 US

 ddlars

 in

 extre

 liqudity,

 but

 the impact

 of

 these

 dces

 not

 tñcMe

 down

 in

  indusÖn

 have

 c›nly

 recenlly

 pessed

 SON

  This

 lack

 of

 fiscal

 flexibility

 is

 not

 only having

 a

 detrimental

 imp8ct

 on

 Africas initial

 response

 to

 the

 COVID-19

  had

 raoorded

 a

 single

 case;

 the

 majority

 are

 now

 easing

 restrictions

 even

 as,

 in

 some

 cases,

 case curves

 acoeierate.

 On

 aggregate,

 the

 economic

 rebound

 pandemic,

 but

 will

 also

 greatly

 affect its

 longer-term

 ability

 to

 recover.

 be judge

 that

 only

 five

 countries

 can engage

 in

 stimulus

 spending

 on

 a

 will

 be

 slow,

 partly

 bee-a\

 se

 many

 African c‹xintries’

 fiscal

 positions

 will

 constrain grov/Th.

 AfrwB*s

 real

 per

 GDP

 is

 set to

 drop

 to

 feels last

 seen

 in

 the

  \670s. Howe"er.

 that

 does

 not

 imply

 all

 countries will

 struggle.

 Some

 cr›untr›es

 ar+

 in

 a

 strong position

 to

 quickly,

 with

 the

 ot Mauritius

 and

 Morocco

 expected

 to make

 ‹jui

  k

 n-x:‹›v

  s

 ‹›nc›r•

 irflerrlntic

 nM

 t‹›urisI return.

 From

 a

 regional

 perspective,

 most of

 the

 fastest-growing

 countries

 will

 be

 in

  DI

 produœrs

 have

 a

 cliflicult

 decade ahead,

 mainly

 because

 thèse

 econoiries au

  \

 ndiversifigd.

 fuck

 6

 dynamm

 private s¢ctor,

 ar›d

 are

 hamstrung

 by

 comJption, inefficient

 govenmenls,

 poor

 and

 chcllenging

 business

 environmants. Furtherrrore.

 with

 macroeconoiric iinbalances

 and

 debt

 leveis

 fJaving

 risen sharply,

 we

 expœt

 natimal

 finanmal

 crises to

 becorne

 more

 frequent.

 AltlJough

 dilTicult In

  viol,

 the

 ountries

 with

 week

 lisant positions

 shotlld

 be monitored

 closely,

 This also

 represents

 a

 downside

 risK

 to

 chose

 he9e

 lakdown9

 ae

 Deirig

 eesed

 eerly

 because

 govemrrients

 cannot

 afford

 to Maintain

 the

 reduction

 in

 tax

 raverxJes

 or the

 exp...

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